Critically compare the theoretical perspectives and practical implications of Coase (1937)
and Penrose (1959) in terms of their views on (i) the size of firms and (ii) the growth of
- You should complete this task using and citing all theories and concepts covered in Part
I of this module – (a) Transaction cost theory of the firm (Coase, 1937), (b) Penrose’s
the theory of the growth of the firm (Penrose, 1959), (c) Adverse selection (Akerlof,
1970), Agency theory (Eisenhardt, 1989), (d) 5 Forces analysis (Porter, 1980), (e)
Resource-based view of the firm (Barney, 1991), (f) vertical integration and diversification.
- Please note that this task is NOT a descriptive summary of those theories (e.g.,
summary of theory A, then theory B, then theory C…..). Rather, those theories should
be used and cited systematically in your discussion and analysis of key theoretical
perspectives and practical implications initiated by Coase (1937) and Penrose (1959).
Akerlof, G.A. (1970) ‘The market for “lemons”: qualitative uncertainty and the market mechanism’,
Quarterly Journal of Economics, 84 (3): 488-500.
Barney, J. (1991) ‘Firm Resources and Sustained Competitive Advantage’, Journal of Management,
17 (1): 99-120.
Coase, R. (1937) ‘The nature of the firm’, Economica, 4(16): 386-405.
Penrose, E. (1959) The theory of the growth of the firm, New York: Oxford University Press.
Eisenhardt, K.M. (1989) ‘Agency Theory: An Assessment and Review’, Academy of Management
Review, 14(1): 57-74.
Porter, M. (1980) Competitive Strategy, New York: Free Press, Ch1 (pp. 3-32).